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Micro-Cap Activist Holder Urges Sale Of Exa Corp

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Exa Corp (NASDAQ: EXA) shares jumped Wednesday after an activist shareholder urged the micro-cap software company to put itself up for sale.

Exa's takeover value is worth $16 to $20 per share, or $220 to $280 million, according to Discovery Group LLC, which has a 7 percent stake in Exam and urged its board Wednesday to review strategic options.

Exa traded recently at $11.27 per share, up 4.6 percent. The company makes simulation software for automotive design and has a market capitalization of $148 million.

Discovery speculated that at least a half-dozen far larger companies might be interested in buying Exam, including Ansys Inc., Autodesk Inc. and Siemens AG, "all of which have been highly active in pursuing acquisitions."

Discovery made the recommendation in a meeting last week with Exa Chairman John J. Shields III and Chief Executive Stephen A. Remondi.

"Unfortunately, Mr. Shields would not confirm that he would share" the recommendation with Exa's board, Discovery said in a letter to directors. "So we are communicating with you directly."

Exa went public in 2012. Daily trading volume has declined steadily since then to less than $200,000 in the most recent quarter, Discovery noted.

Discovery said the circumstance is common among micro-caps "where their small float, limited trading volume, and general lack of research coverage lead to low institutional investor interest."

 

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